April 22, 2020

Pitts Carr and Alex Weatherby

What happens to the expenses in my case after settlement?

Litigation is time-consuming and expensive. There’s no way to sugar coat it. Medical records, depositions, and court costs add up quickly. For a personal injury case, the expenses will likely be in the thousands of dollars. 

Most folks understandably don’t want to pay for litigation expenses on top of everything else. In a truck accident, brain injury, burn injury, pedestrian accident, or other types of contingency litigation, lawyers are able to pay for the expenses upfront, but they are required to be reimbursed for those expenses with the proceeds from the settlement.

The Georgia Rules of Professional Conduct express rules on what a lawyer can and cannot do ethically. 

Rule 1.8 states as follows: “A lawyer shall not provide financial assistance to a client in connection with pending or contemplated litigation, except that: a lawyer may advance court costs and expenses of litigation, the repayment of which may be contingent on the outcome of the matter….” In some circumstances, such as when the client cannot pay for expenses and there is no pool of money (like a settlement) to reimburse the lawyer, the lawyer is permitted to pay for litigation expenses.

The rule has practical roots. Litigation is expensive, and a lawyer and a client are best served by being equally invested in the litigation expenses. A lawyer is invested in not over-expending on a case that may result in no recovery.

A client is likewise invested in keeping expenses low as they will be taken out of the settlement in the end.

Throughout the litigation, we keep our clients informed about expenses.

We discuss the real-life implication that taking a deposition, hiring an expert, or purchasing demonstrative evidence has on the case and the recovery.

Some expenses are necessary and important to maximize the value of the case. Others may not be worth the expense.

We keep our clients informed, so they know what to expect and why we make the decisions we make.

Typically, at the end of a case, a lawyer will provide a settlement disbursement schedule to the client. This schedule will show the client the total settlement, the amount of itemized expenses, the amount of attorney’s fees, any other expenses (like liens), and the total to the client. Our settlement disbursement schedule typically looks like this:

SETTLEMENT DISBURSEMENT SCHEDULE

Settlement amount: …………………………………………………………     $XXXXXX

Less attorney fees: …………………………………………………………     ($XXXXXX)

Net settlement proceeds: ……………………………………………………     $XXXXXX

Less expenses (see below for breakdown) …………………………………  ($XXXXXX)

Less lien payment ……………………………………………………………    ($XXXXXX)

Payment to Client …………………………………………………………….    $XXXXXX

I understand and agree with the above-referenced breakdown.

This ____ day of ____, 20___.

______________________________

Client Signature

At the end of our case, we sit down with our clients and go through this schedule in detail. We want to make sure that the client understands where the settlement funds are going and why.